Education vouchers – some redeeming features

The scheme can help poor families in a commercialised school system

There are those who believe that some things, such as healthcare or the road network, are just too important to leave in the hands of the market. And there are those who believe that some things, such as food or petrol, are just too important to leave in the hands of government.

Neither side can be happy with the British school system. The state sector dominates, but quality is patchy and any pretence of egalitarianism is punctured by the many ways in which money can buy an advantage: private school, extra tuition, expensive houses in the right catchment area … Worse, none of this money goes to benefit the state-school system.

Is there a better way? One could, of course, try to negate the advantage that cash brings: this was presumably the philosophy behind Brighton and Hove’s decision in 2007 to allocate school places by lottery rather than proximity. Or more radically, we could nationalise Eton and criminalise after-hours maths tuition.

A more appealing alternative is to let the pendulum swing the other way, and privatise a large slice of the state school sector. Anyone who meets government standards could set up a school, and they could charge whatever they wanted to and make a profit if they could. This idea would embrace the willingness of many parents to spend time and money trying to obtain a good education for their kids.

We couldn’t allow the children of poor families to be cast adrift in a commercialised education system, and there are two things we could easily do to prevent that. The first is to give every family an education voucher for, say, £6,000, redeemable at any school. Poor families could get more; the current “pupil premium” for poorer children is £600, so we could add that sum, or more, to the voucher.

The second is that the government could continue to run schools, charging a fee equivalent to the voucher. Families who want exactly what they’re getting now – education both funded and provided by the government – could have it.

What possible objections could there be to this idea? Let’s consider a few. The first is that some parents couldn’t or wouldn’t spend their vouchers carefully, and their child would fall further behind her more fortunate peers. This is a risk – but competition is a powerful force, even if not everybody plays the game. People who do not bother to check prices at supermarkets will still benefit because more price-sensitive people are keeping the supermarkets honest. Similarly, schools must raise standards to attract pupils, even if not everyone responds to the improvement.

The second concern is that schools will sometimes go bankrupt, and this will cause disruption. I have two words in response: Hurricane Katrina. After Katrina devastated New Orleans, many children ended up at better schools elsewhere. A study by the economist Bruce Sacerdote revealed that despite months with no schooling at all, and appalling stress and dislocation, the children who had to move schools quickly overtook the educational achievements of the slightly older children, who had finished school before the hurricane hit. When bad schools disappear, that is probably a good thing – even for those pupils who must move.

A third concern is that the voucher system will lead to a free-for-all, with schools provided by charlatans or religious extremists.

Clearly there must be some government oversight as a backstop to competitive pressure. The Finnish educationalist Pasi Sahlberg points out that the world’s leading school systems all make educational equality a high priority. That has to give pause for thought to an enthusiast for completely unregulated voucher schemes.

Nobody can be sure what might happen if a part of the UK embraced a voucher scheme; I can’t help thinking that it is worth a try.

19 Comments

Surely the biggest issue about seeking a market solution to education is that we have no actual way of measuring the value of education.

The value of sending your child to Eton isn’t in the grades they get, although they are probably more likely to be higher than if you send your child to a state school, it is their personal development in leadership, confidence etc. Similarly, those parents who choose to send their child to a local state school, despite having the means to pay for a private education, want their child to benefit from an experience of mixing with a far wider range of individuals than the private school would allow.

Grade measurements are, at best, an indicator of the relative success of a school; but a secondary school is dependent on its feeder primary schools (and arguably pre-school) to determine the eventual outcome of each pupil.

A voucher system based purely on grade measurements as a demonstration of success would lead simply to schools choosing not to enter weaker pupils for exams, or worse still teaching them only to pass exams, and not educating them for life.

Nice article.
I guess the deadweight cost could be reclaimed by lowering the threshold for upper rate income tax?

A word of caution about taking it as read that Finland does things best. It has been argued that it happens to teach in a way that suits the PISA test. Also it did not do well at all on the TIMMS maths test and subsequently has not taken it. Also it abolished its equivalent of OFSTED and gave autonomy to schools which were then judged on results on public exams. Autonomy and accountability appear to matter and those things come automatically with a voucher system. The big danger with vouchers is government creep.

Olly: surely that’s the parents choice. If they value the better preparation for life one school gives over the likelihood of better grades at another school, then the market system caters for that. If the parents and pupils don’t value it, then that school either needs to market its advantages better, improve the grades kids get, or close down. If it is successful at marketing its “life skills” prowess, than that may well cause other schools to up their “life skills” game.

100% agree. Also, what about vouchers for Fire Brigade? People who felt their houses were more likely to burn down, e.g. smokers, could pay for a higher level of private fire service whilst the government could continue to fund a basic fire service for the less affluent. And let’s not forget the Police, Armed Forces and, of course, Health Service while we are at it.

One has to remember that there are many services that benefit society as a whole, and ability or willingness to pay does not necessarily correlate with the need for the service or benefit received. A voucher system would undermine the basic service provision in an unacceptable way.

I have no problem with private education per se but it is a luxury. If you choose to pay for it, it does not remove any obligation for you to pay for the general education of society as a whole.

Will this not increase inequality in this area? Currently, most children go to a local school, many of which are of broadly similar quality. A fairly small proportion can afford private school (about 7%) or to move to a particular catchment; a few more can afford top-up private tuition.

But under this system, there will be basic government schools for those who can’t afford more than the bare value of the voucher, and then a whole sliding scale up to the top few % who already spend tens of thousands a year. Even with a premium for students from particularly poor background, this seems likely to lead to a particularly stratified system.

Interesting points Tim, a couple of things to consider,
Finland tops the PISA world rankings in terms of school pupil achievement and has no private schools. Educational leaders in Finland do believe the two are related. Of course Finland is a very different society from our own and the place of private education in the culture of our elites makes any ban very unlikely.
Would a purely private system exacerbate problems we already have with school competition / league tables etc, with schools employing any trick possible to make themselves appear more attractive and thus improve their profits.
= = =
Dan: Are you quite sure Finland has no private schools? But the point is well made, hence my mention of Pasi Sahlberg in the penultimate paragraph. – TH

This is sort of what happens in Australia where private schools get government subsidies per student varying by a complicated and forever controversial formula. However, you missed the most obvious “objection”. The voucher becomes the base price no matter how high its value. Even if the voucher pays for a good education some that are able, will pay a lot more to get an advantage that others can’t afford.

Schools can be improved a lot by publishing performance data. The profession hates it because the half of the schools below average get a hard time but I’ve seen it make a huge difference.

I was a board member of a school that was performing poorly in whole of system testing. To my consternation this data, while secret, wasn’t seen as important and the focus was on social engineering and the like. I changed schools at some social cost to my child. Then the government changed the rules so that the data was published. The parent body were in uproar and the school reacted quickly to that pressure in a way that I thought they should have earlier. Good data makes a big difference because parents will use it when available to effect change.

A possible downside is a “run on a school”, similar to a bank. If a school has a minor problem(financial or educational), some children will be pulled out, taking their money. This will exacerbate the problem until the school collapses. I know the same thing happens now, but adding money will surely make it more likely.

A key point (alluded to in some of other replies) is that schools have an inbuild positive feedback mechanism that makes equality very difficult. A “good” school will naturally attract parents who particularly value education. Those parents will likely give their child support in many other ways and are probably more educated themselves.

So take 2 identical schools. If one starts charging more than the base voucher it will end up selecting richer parents willing to pay for education. This will likely raise its results regardless of any actual improvement.

Meanwhile the neigbouring school now has fewer children from homes that value education. This could create an environment less conducive to education and lower the whole quality of the school. The intervention has therefore reduced the quality of education for some children.

Whether this would actually happen needs evidence but the possibility should be considered.

The fundamental problem with education in the UK (which the voucher system proposed here would not address) is that the people who make the decisions about education policy are not affected by the results of those decisions. The children of the political elite are generally not educated in the state system. The easiest solution to this problem is to make private education illegal.

Some of the speculation above about what might go wrong with vouchers is not really necessary. Sweden has had them for quite a while now and the results appear to have been quite good. They were once strongly opposed in Sweden. I believe they are now mostly accepted. The proportion of children at them is steadily growing. Parents have a bigger choice of teaching styles than in Britain with different companies having interestingly different ideas on the subject. In Britain there tends to be a teaching orthodoxy which sometimes has had disastrous results – notably in the large numbers people emerging from our state schools functionally illiterate.

One of the key issues with vouchers is whether or not you allow parent top-ups. In Sweden they do not. Politically this is brilliant. It means that no one can say that one school is doing better than another because of the large amount of extra money put into it. But it has the disadvantage that the facilities and other things that money can buy cannot be bought. There is a cap on things.

Tim, I have heard quoted that the ‘average’ annal cost of state secondary education is £34,000 per annum per pupil. Firstly there is a “more or less” question here, is this correct? But on they basis that it is every state educated child in the country could go to Eton. Those in private school currently would ave to pay more to go to state school? Your £6,000 looks a bit thin for either sector.
= =
Simon – that number sounds way out to me. – TH

The answer to these objections is for supply-side reform to go hand-in-hand with the demand side reform of vouchers. Free schools and/or more schooling resources generally: more schools, buildings, classrooms, materials, and teachers. In that way the advantage of wealth is arbitraged away as poor folks get to send their kids to smaller classes and the gap disappears.

Not sure what it costs in Britain but £6,000 isn’t enough for Australia. My local state High
School costs GBP£8,325.72 per student per year excluding capital costs and the nearby private school GBP£11,948.05. Figures for every Australian school are at http://www.myschool.edu.au .

I can’t see how Sweden could stop parents topping up vouchers as parents always contribute to children’s education costs through tutoring, materials, excursions etc. and it would be neither desirable nor possible to stop. These private contributions even when they don’t go through the school accounts are semi compulsory and they vary by school. I know they are higher at the nearby private school than the nearby state school for instance as they have better excursions, multiple sports uniforms etc.

Before discussing how to provide education, we should first decide what it is for, what nature should it be, to what standard, and whether this should be the same for all.
I am acquainted with several young people who took on degrees, only to get jobs where they were not required. Virtually everyone I know, of any age, took subjects at school in which they had no interest, and which they have forgotten entirely. A large number of people known to me struggled in the lower half of their school until they could get out at sixteen- presumably their number is even greater now that school is compulsory until eighteen. Most of them got jobs for which they were adequately educated at 12 (e.g. shop assistant, street sweeper). A lot of public money is wasted pretending to educate people whilst at the same time preventing them from employing the abilities they have.
In as much as education achievement is measured, it is the priorities of an academic elite that guides the standards set- extra people cajoled or coerced into reaching a set standard in, say, maths is regarded as an improvement, regardless whether they have any use for the knowledge, and regardless of the number cajoled or coerced into trying and failing. Their do not seem to be any international standards for carpentry, driving, only in academic skills only useful to a minority.
It is high time we recognised that there is life outside academia, and that this is the life that most people will live. Education is only valuable if it benefits the lives of those educated.
So how to get an education system that best suits every individual?
Firstly, the people who best know the children are their parents, given that parents have the children for most of the day every day for years on end, and expect to know them for life- not a schoolteacher who has the children a few hours a day 150 days a year in company with thirty odd others, and expects not to see them again after a year or maybe two. I know there are such things as bad parents, but most of us receive far more help guidance and support either from or via our parents than we do from any professional. Of course there would be parents who made the wrong choices, but then as touched on above very many children are forced into wrong choices by the current system: I am confident that parents would make better choices as they know their children better and they care more- and have fewer ulterior motives.
May I suggest that rather than a fixed value voucher, a fixed sum (6000 sounds about right) is paid into an individual education account for each child. Any money unspent in the account at, say, 21, will become the absolute property of the account owner, to be used for whatever (s)he thinks fit. Any private person could top this up if they wished.
Every school, whoever owned it, would be run as a private school, receiving money from the educational account.
Parents would have a motive to consider the subjects being taught, the standard being taught to, the standard of teaching, the hours, the proximity and the price as well.
People who wish to spend more on education than the standard allowance would be free to do so.
Oh and the money should be available to fund the learning of skills as well as academic subjects. Why we insist, as effectively we do at the moment, that every driver, whether of taxi, bus, van or lorry must first fund the most important part of their own education privately, whereas a course to A level in mathematics and economics is “free”. After all, we need a lot more drivers than we do mathematicians or economists, and I fancy we’d miss them more if they went.
Educationalists indeed profess a keenness for equality- when their own positions are assured. You don’t hear many proposing that schools be staffed by lottery (thus giving an equal chance to all), far less that educational standards be set by non-academics.
The present system seems to me an example of producer capture- it is run for the benefit of education professionals and public benefit is incidental. This has come about because everyone in the country has been subjected, by law, to eleven (now thirteen) years of propaganda as to the benefits of education, and those in power have usually been the ones who have actually benefited from this, not the majority who haven’t.
And whilst we’re at it, why not re-consider compulsion in education. Prior to education becoming compulsory 95% of children received a primary education- the main effect has been to introduce disruptive children into schools. At least set a school leaving exam, so that those there have both a motive to learn, and a means of working their way out before they reach 18.

The problem is that it’s very difficult for someone to set up a school, and pupils are naturally limited in how far they can travel. Also, pupils won’t tend to change schools often. So I don’t see a dynamic free market developing with the feedback you talk about.

Another consideration, is that people focus heavily on exam results, but a Radio 4 programme suggested that the school a pupil goes to perhaps only influences a 20 percent variation in those results, with family background and other factors being far more important for good results.

Why can’t we develop a great state system? Make teaching a great job and attract good people, and more importantly allow them to try new things without fear of failure (yeah, I read Adapt).

At the moment, education is like a political football. It needs to be teacher and student centred. Kids are treated like cattle and schools become miserable places where creative teachers don’t want to stay. Kids need to be doing stuff they actually care about and are engaged with, not simply cramming for grades for politicians to boast about.

Simon – “less”. £34 000 per pupil is a touch steep. Yes, that would (just about) cover Eton. Cost to the taxpayer of bringing state education up to that particular standard would be over £100 billion increase. Anyway, Eton’s a bad comparison because of the boarding costs.

Ken – looks like Aussie kids are getting a good deal, or your schools are inefficient…

DfE Statistical First Release Jan 2011; 4.1 million State Primary; 3.3 million State Secondary pupils

So 37612832695.75/7 400 000 = £5100 per pupil.
That’s a bit skewed because primaries are cheaper than secondaries. That set of stats doesn’t allow secondaries to be split off but I’ve got some marking to do so I’ll get someone else to dig for me…

BBC News 12 Jan 2011:

The secondary schools list is topped by Tower Hamlets (£8,058 on average per pupil), followed by Hackney (£7,962) and Lambeth (£7,207). Knowsley in Merseyside receives the lowest, (with £3,790), followed by Solihull (£4,445) and Swindon (£4,563). [London schools are a lot more expensive to run because of the London weighting on teachers’ salaries]

At primary level, the Isles of Scilly (£8,736), City of London (£7,401), and Tower Hamlets (£5,967) top the table, with South Gloucestershire (£3,328), Central Bedfordshire (£3,354) and Solihull (£3,432) at the bottom.

One interesting point is that a business with more customers usually ends up a better business. However, it’s generally accepted that smaller class sizes (and presumably smaller schools) are better. The most expensive school in the world, Collège Alpin Beau Soleil in Switzerland (CHF 160k pa) has average class sizes of 4.
Also, if we’re to have schools run as businesses in the market, we’d better accept the fact that the better ones will make profits, perhaps considerable profits, and those who run them will be (very) paid. For all the talk of paying teachers more, when it comes to £500k headteachers I think we all know what the good British public will conclude: burn the witch!!